B of A will you invest now?

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babbling looney's picture
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babbling looney's picture
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Ooops hit the enter key to fast.  
Since B of A is going to give credit cards to illegal immigrants will this affect your decision to offer their stock or bonds as investments?
Besides the fact that they plan to skip all of the money laundering homeland security B.S. that we have to put up with,   don't you think this is going to adversely hit the bottom line.  Why should/would a person who is in this country illegally make good on credit card loans. What kind of incentive do they have to pay anything back.  Ever! *** I don't care how high of an interest rate you charge, if you can't collect, it is a moot point. 
I was going to offer the latest B of A internotes until this came out.  In fact I predict a swarm of people pulling their money and investments from the bank.
*** One of my clients who owns several very large ranches and who employs quite a few immigrants said they do everything they can to determine if they are legal or not, but suspects many aren't.  Because they may not have driver's licenses or the ones they have are most likely fake, the guys buy beater cars for about $500.00, don't carry any insurance because they can't and if they get in a wreck or the car needs to be repaired they just junk it along the side of some back road.  Rinse and repeat.   The cops know this, the insurance companies know this...everyone knows it.
The rules are not applied to the illegal immigrants, yet we who do play by the rules have to pay through the nose for car insurance, house insurance, quarterly income tax withholding and DON'T even get me started on medical insurance.  The Doctors that I do business with call the Calif Medi-cal card the "Medi-cal Gold Card", meaning that every hang nail ,diaper rash or minor sniffles gets paid for by the State because they come to the hospital emergency room.  No questions asked, just give the Calif Gold Card and ta dah 100% paid for.

Spaceman Spiff's picture
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I wonder if Fitch is going to renig on their decision to upgrade B of A's debt rating? 
Seems like a stupid business move.  People are already pissed about the immigration issues in this country and the lack of concern by the President.  Now they can get credit cards and home loans?  To establish their credit?  Give me a break.  You can't tell me the people at B of A don't know that they are going to be giving credit to illegals.  How do they plan on tracking down these people when they rack up $10K in credit card debt and then move to a different house?  Guess who pays that bill. 
BAC is the my largest stock holding.  Near it's 52 week high.  Sounds like a great time to take some profits and reduce exposure.  Can anyone tell me why I shouldn't do that? 

anonymous's picture
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It may piss me off, but it sure seems like a great business decision.  They're not stupid about this stuff.  The people have  to have a deposit it at the bank and pay high interest.   The ones who are getting screwed in the deal are the illegals.

exdrone's picture
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Hasn't the great Jones equity marketing department come up with an analogy to help you understand how banks make money.  I would imagine that Fes should be on your branch TV any time now explaining that illegal aliens have nipples too and BAC has figured out how to milk them.

babbling looney's picture
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Sounds like a great time to take some profits and reduce exposure.  Can anyone tell me why I shouldn't do that? 
 
My sentiments exactly.  In fact I have had clients call me requesting to sell.  I am in a red red red county in a blue state.  85% registered republicans and the rest are probably militant libertarians.

Spaceman Spiff's picture
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exdrone wrote:
Hasn't the great Jones equity marketing department come up with an analogy to help you understand how banks make money.  I would imagine that Fes should be on your branch TV any time now explaining that illegal aliens have nipples too and BAC has figured out how to milk them.

No, we understand how banks make money and this one doesn't really make sense.  Yes, they charge high interest rates and there is a fee upfront.  Let's play the what if game.
What if you are BOA and you have Jose (name changed to protect the innocent) the illegal alien at the desk in front of you.  No SS#, fake drivers license, temporary address.  He wants to open a savings acct with the $500 he just got paid (which btw he never paid income taxes on).  Great, good for BOA.  Account opened.
Now, you offer him a credit card with a $5000 limit.  After all, we don't want to lose money on the deal.  He accepts.  Pays let's say $100 to get the card and 20% interest.  Great, good for BOA you just made $$ again.
Jose runs to his local Best Buy and purchases a new PS3, 42" plasma TV, 3 CDs, and an iPod.  Purchases total $3500.  Ring it up on my new BOA card please. 
BOA send the bill to the address of record to collect the money.  Jose has moved on to another job in another city (taking his TV, PS3, iPod and CDs with him).  What now?  Oh, let's keep his $500 from his bank account.  Great, fine.  Jose's happy.  You're down over $2000 in just a weekend with Jose. 
Who wins in this scenario?  BOA or Jose?  Multiply that by millions and I think you begin to understand why looney started the thread. 
I don't mind immigrants coming here for a better way of life.  None of us are probably more than a couple hundred years or less away from our ancestors doing that.  I'm glad they did.  I'm more glad they did it right.  
  
 
 

doberman's picture
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If you lock the doors to your house, then you support stricter border controls.

babbling looney's picture
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Spaceman Spiff wrote:exdrone wrote:
Hasn't the great Jones equity marketing department come up with an analogy to help you understand how banks make money.  I would imagine that Fes should be on your branch TV any time now explaining that illegal aliens have nipples too and BAC has figured out how to milk them.

No, we understand how banks make money and this one doesn't really make sense.  Yes, they charge high interest rates and there is a fee upfront.  Let's play the what if game.
What if you are BOA and you have Jose (name changed to protect the innocent) the illegal alien at the desk in front of you.  No SS#, fake drivers license, temporary address.  He wants to open a savings acct with the $500 he just got paid (which btw he never paid income taxes on).  Great, good for BOA.  Account opened.
Now, you offer him a credit card with a $5000 limit.  After all, we don't want to lose money on the deal.  He accepts.  Pays let's say $100 to get the card and 20% interest.  Great, good for BOA you just made $$ again.
Jose runs to his local Best Buy and purchases a new PS3, 42" plasma TV, 3 CDs, and an iPod.  Purchases total $3500.  Ring it up on my new BOA card please. 
BOA send the bill to the address of record to collect the money.  Jose has moved on to another job in another city (taking his TV, PS3, iPod and CDs with him).  What now?  Oh, let's keep his $500 from his bank account.  Great, fine.  Jose's happy.  You're down over $2000 in just a weekend with Jose. 
Who wins in this scenario?  BOA or Jose?  Multiply that by millions and I think you begin to understand why looney started the thread. 
I don't mind immigrants coming here for a better way of life.  None of us are probably more than a couple hundred years or less away from our ancestors doing that.  I'm glad they did.  I'm more glad they did it right.  
 
Further on the scenario.  Jose ,now moved to another town becomes HoseB.  New fake drivers ID, still no SS#, new temporary address.  Same scenario, new stuff from Best Buy or McMahans.  Then he becomes HoseC in another town.... same thing.
The scenario is endless.  Because of all the credit card losses the companies will have to raise their prices on goods to make up for the losses.  Goods probably delivered by HoseD who also is applying for a nifty new credit card.
I'm only one generation from immigrants (my Grandfather and Grandmother),who couldn't speak any English. In fact my ancestors spoke a language almost no one understands or can pronounce(Welsh).  I have the greatest admiration for them. But as Spaceman says they did it right.
I see nothing but disaster in this scenario. I also see a big backlash for B of A with conservative investors. 

skeedaddy2's picture
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BL,

When you refer to conservative investors are you saying as in "risk-
averse", politically conservative or just plain anti-immigration paranoid
(Americans are losing our good paying jobs to Jose...)protectionists?

If you think BAC is heading towards ruin, then you should know that
despite Bank of America's compelling interest in Latino markets, it was
arch-rival Wells Fargo that kicked off the competition in 2001, when it
became the first U.S. bank to accept identification cards from Mexican
consulates to open an account.

Since then, Wells has opened more than 1 million accounts for Mexicans
using the consular card. It also accepts Guatemalan, Argentine and
Colombian identity cards. The assumption is that most immigrants using
the cards to identify themselves are here illegally.

Citibank already issues credit cards to some immigrants without Social
Security numbers if they have taxpayer identification numbers. Citi issues
such cards under its own brand and the brand of its subsidiary, Banamex
USA.

Any rational person can agree that Mexicans and immigrants in general
did not invent identity fraud, credit card fraud and mortgage fraud. Just
read the papers and you'll see that corporate America does just fine in
those areas without them [immigrants].

I'm debating whether you are instigating controversy or if you truly
believe what you've written. If its the later, then re-read your own
signature.

now_indy's picture
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doberman wrote:
If you lock the doors to your house, then you support stricter border controls.

babbling looney's picture
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http://www.10news.com/news/11039022/detail.html
Don't you think that movements like this will be eventually hurting BofA's bottom line?  I don't plan to encourage any new investments in this company until they get this straightened out. I have already had 3 customers liquidate substantial stock positions as well.  They called me and requested the sales.  I can't imagine that I am the only FA that has had clients that are hopping mad.

planrcoach's picture
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Not a very good PR move. In terms of the North American economy, why not offer them credit, or anything else that levels the playing field? How is this hurting anyone or anything, other than addressing an economic reality.

AllREIT's picture
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babbling looney wrote:They called me and requested the sales.  I can't imagine that I am the only FA that has had clients that are hopping mad.

The credit losses on this will be very impressive, and there will be a
fair bit of lag time as it takes 60+ days for an account to become
seriously delinquent.

BAC is begging for a wave of credit card fraud
and illegals going wild with the card and then moving on in life (w/ a
new 60in plasma TV). Retailers will get sick of this as well, b/c one
of the best forms of CC fraud is return fraud to earn gift
certificates.

AllREIT's picture
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AllREIT wrote:wave of credit card fraud

Better than this is check fraud combined with the CC.

Get a new no-doc account. Fund it, order extra checks and go wild with
the checkbook and credit card. The checks are an added bonus, since w/o
electronic presentment no one will know the account is hopelessly
overdrawn.

skeedaddy2's picture
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If it weren't for an inverted yield curve and sub-prime mortgage capitulation
to come, I'd gladly take the other side of this trade. Those shareholders that
are seling must grow their own vegetables.

I've got popcorn in the micro to watch/witness this anti-immigration orgy/
lovefest that you guys are exhibiting. Have you forgotten how hard it is to
get a bank to give you a loan or a line of credit?   

Thanks for the "the migrant worker with the $500 car and $3000 plasma..."
that's a pisser.

planrcoach's picture
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Jose runs to his local Best Buy and purchases a new PS3, 42" plasma TV, 3 CDs, and an iPod.  Purchases total $3500.  Ring it up on my new BOA card please. 
Who cares?
The credit card business has some pretty sophisticated players, I'd be surprised if this is anything but a bad PR move.
Does anyone here really doubt that Mexican Americans, legal or otherwise, are not so important to this North American economy as to allow our capitalist market find them, free from the self-interested paranoia of the media and our politicians? Is this really the " registered representative " forum ?
Allreit, you sound like a cranky old person on this one.

babbling looney's picture
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Have you forgotten how hard it is to get a bank to give you a loan or a line of credit?
Eff no. I haven't forgotten. I used to be a commercial lender.  This new move is without any of the checks and secondary precautions that I operated under. And it pisses me off. 
All they need to do is have a checking account for a short period of time, with no overdrafts and an ID card from their consulate. A card that is easily counterfeited and there is no way to verify the legality.  Ta Dah instant credit!!!!  It doesn't mean that you have to be an illegal alien to play this little game.  Anyone who wants to pretend to be a person without a Social Security number, can get a fake ID from an ID mill saying they are from Romania or Mexico or where ever.  Did you never get a fake ID so you could drink under age????   Heck why stop at one card.  Let's open up multiple accounts under multiple fake IDs  in multiple banks and get lots of credit cards.  After all who is going to be able to track you down.....you don't really exist.
WHO CARES?? are you brain dead??  Do you understand nothing about economics.  I know you live in happy joy joy land from the tenor of your advice but try to face reality.
The companies that are losing money on noncollectable debt care. They are going to pass the losses on to the rest of the people who are paying their debt in the form of higher interest rates and fees.  I care, because I am one of those people. The companies that are selling the goods that are not collected on care.  They don't get reimbursed at 100% all of the time for their losses.  To cover those loses the cost of goods will go up. The businesses that extend additional credit to deadbeats who have obtained instant credit with no accountability may soon become the next target in the scam machine: they care.
Yes, this does belong on a RR web site discussion if it impacts the economic viability of companies that we are recommending to our clients.
Does anyone here really doubt that Mexican Americans, legal or otherwise, are not so important to this North American economy as to allow our capitalist market find them, free from the self-interested paranoia of the media and our politicians?
This sentence makes no sense. Are you trying to say that if the illegal aliens (illegal=breaking the law) are making people money it's OK.  We should allow people to break the law as long as it is important to the economy?   So, by that reasoning if the underground sex slave and child pornography trade was an economic boon to the economy, it's Ok ....and we should recommend the stock in the Kiddies Gone Wild Porn Video business?  By capitalizing on this market don't you think we are sacrificing our integrity?  I do.  You don't I take it.

planrcoach's picture
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WHO CARES?? are you brain dead??  Do you understand nothing about economics.  I know you live in happy joy joy land from the tenor of your advice but try to face reality.
The companies that are losing money on noncollectable debt care. They are going to pass the losses on to the rest of the people who are paying their debt in the form of higher interest rates and fees.  I care, because I am one of those people. The companies that are selling the goods that are not collected on care.  They don't get reimbursed at 100% all of the time for their losses.  To cover those loses the cost of goods will go up.
So you are saying that if Mexicans in America get credit from B of A, the cost of big screen TVs at Best Buy will go up for everyone.
Yes, this does belong on a RR web site discussion if it impacts the economic viability of companies that we are recommending to our clients.
I think its a great forum topic. What I can't believe is the apparent socialist whining and apparent hypocracy. " We'll give you a job to help harvest our crops and build our houses, regardless of your immigration status, but you can't have any credit card (a convenient and cashless way to handle money), because " Jose" might blow it on a big screen TV and be irresponsible about making the monthly payments.
Do you understand nothing about economics.  I know you live in happy joy joy land from the tenor of your advice but try to face reality.
The layers of irony here are amusing. I think the economic ignorance in this country is a root problem. As I recall, you are a big fan of selling annuites. Don't "give" credit cards to the people who are maintaining our successful economy, though.
And then, when an otherwise enlightened client calls up and wants to dump the B of A stock as an apparent emotional reaction to media political correctness pandering (their "illegal") you pander to your client's wishes. It all just seems to be a bit hypocrytical, I'm sure I'm guilty of being hypocrytical in some ways, too.

planrcoach's picture
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Are you trying to say that if the illegal aliens (illegal=breaking the law) are making people money it's OK.  We should allow people to break the law as long as it is important to the economy?  
Are you serious here? Last I checked, someone is giving these people jobs - they, illegal = breaking the law - are not just standing on street corners, sucking up resources. Do you really have a handle on what is going on in our economy right now? I wonder what is really driving productivity in the American economy. I wonder is our unofficial policy is, let "them" in to take the jobs that let some of "us" practice comparative advantage, and focus on more value added tasks to help us compete in a global economy where labor itself is increasingly commoditized - so that we can compete with the developing economies of Southeast Asia and Brazil and China.
Frankly, I commend B of A for not being hypocritical. Sure, its a profit center activity - but it is in no way unpatriotic or exploitative. Rather it recognizes a reality - that America is blessed to have guest workers, illegal aliens, and permanent immigrants that come from a hard working, family oriented and fun loving culture that loves God. Since you say, By capitalizing on this market don't you think we are sacrificing our integrity?  I do. , and you equate all of this with legalizing child porn and all, it is clear where you stand.
Anyway, I'll let you fight that battle - if you are a conservative, I am dumbfounded as to how you could choose to take on the prosecution of " illegals" in a free economy. Okay, we need some controls, don't make a battle out of it. If you are a liberal, you are just trying to practice union economics. I think the B of A can look out after itself, thank you.

planrcoach's picture
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 The credit losses on this will be very impressive, and there will be a fair bit of lag time as it takes 60+ days for an account to become seriously delinquent.BAC is begging for a wave of credit card fraud and illegals going wild with the card and then moving on in life (w/ a new 60in plasma TV). Retailers will get sick of this as well, b/c one of the best forms of CC fraud is return fraud to earn gift certificates.
Pure speculation. Some pretty sharp cookies in the credit card industry might have already thought about this scenario. This is logical, but not necessarily practical thinking. I'm just trying to picture those wild illegals schlocking that 60 inch TV in the back of their truck on to the next life. No one will accuse you of trying to be pc, though.  

AllREIT's picture
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planrcoach wrote:The credit card business has some pretty sophisticated players

So did Enron.

Quote:
Allreit, you sound like a cranky old person on this one.

I'm a crank, but never cranky.

AllREIT's picture
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planrcoach wrote: Do you really have a handle on what is going on in
our economy right now? I wonder what is really driving productivity in
the American economy.

My thoughts on the outcome of BAC's move are in my sig.

----

More seriously, people who are in this country illegaly are criminals
as are those who employ them. Weather this is common or not, has
nothing to do with the legality of it.

BAC is aiding this problem. So this is a bad move for that reason alone.

BAC is also exposing themselves to massive credit issues by lending
money to rootless people with unstable income. If these people are
deported, do you think paying their CC bills will be a priority?

Above and beyond the credit risk issue, is the huge opening for
fraudulent transaction's which will happen. It is just too juicy to go
around opening up checking accounts and passing bad checks. Same thing
with opening up and maxing out CC's.

Eventually the feds will end this, because these no doc checking accounts/CC's will have serious issues with money laundering.

So at the very least BAC has tarnished the brand, and proposes going on
an unsound course of action, which creates concerns about management.
Plenty of good reasons to sell and purchase better run banks like NCC
or a bank etf like KBE.

ezmoney's picture
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BOA speaks with a forked tongue. They'll allow illegal aliens w/o SS#'s to get credit cards yet the premiers and banking centers can't work with non-resident aliens. We as FA's also have to go through hell with KYC docs to work with a non-resident alien. These bankers are something else. I'm glad I'm out of here soon.

Philo Kvetch's picture
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I find the dichotomy in all this interesting, to say the least.

We can't open an account without a drivers license, social security number,
proof of citizenship, etc., while banks can, in effect, say in virtually any
language, "Put your mark on the dotted line."

Politics aside, I think this is a smart play for B of A. They're tapping into a
virtually untapped market that is probably much larger than anyone, even in
government, suspects.

ezmoney's picture
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unfortunately it is a much larger market, I mean problem, than most people think.

anonymous's picture
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"BAC is begging for a wave of credit card fraud and illegals going wild with the card and then moving on in life"
BAC isn't stupid.  It's not like they're giving large credit lines with no fees and 0% interest.  We're talking about small credit lines with high fees and high interest. 

babbling looney's picture
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As I recall, you are a big fan of selling annuites
As I recall, you are an idiot.  I have stated in several posts that annuities make up maybe 10% of my book and that they are only appropriate for some people.
And then, when an otherwise enlightened client
 (what does this mean....you think my clients have some inner Zen enlightenment.  What are they enlightened about???  Deeeeep  thoughts?)
calls up and wants to dump the B of A stock as an apparent emotional reaction to media political correctness pandering (their "illegal") you pander to your client's wishes.
There is nothing pandering about deciding to sell a stock at a high valuation when the company has put itself into the political cross hairs of a very touchy subject in a very volatile and interminable Presidential campaign. A. It is the client's money B. I think they are right. C. There are other bank stocks that are not embroiled in this pandering to illegal activities. There are better investments at this time.
It all just seems to be a bit hypocrytical,
Why, yes it does... You try to open an account at your local bank, ask for a credit card and refuse to give them your Social Security number.  Get back to us when you have accomplished this.
It's not like they're giving large credit lines with no fees and 0% interest.  We're talking about small credit lines with high fees and high interest
It doesn't matter that the lines are small and the fees high.  If you can't collect on a high percentage of the fees-not to mention the principal, you still lose.  By this reasoning, if you can't invest a larger amount of money and only plan to do a small dollar cost averaging investment then it isn't a big deal? As we all know those small amounts add up. 
This system of allowing undocumented (unverified) illegal aliens to have access to credit just lends itself to money laundering and fraud. 
Similar to this one
http://www.pbs.org/wgbh/pages/frontline/shows/drugs/special/ us.html
You have hundreds of people using multiple fake identities opening up accounts to get "small" credit cards. These people don't even have to be illegally in the US, just want to take advantage of the open door they have been given. After getting the credit they then can get bigger lines from other easy credit merchandiers (Best Buy, McMahans etc.).  Following me?


  1.  Now they go and buy a lot of highly desirable merchandise (HDTV, computers, electronic equipment)

  2. Default on the loans

  3. Move and become untraceable. After all they don't really exist in the first place

  4. Sell the items on the street for cash at a nice discount.  You know. Stuff that just fell off the truck.

  5. Deposit the cash..... you should know the scenario if you have ever taken any of the mandatory money laundering crap we have to do every year.

  6. Send the money to the destination... Oh I don't know terrorists, drug importers. Use your imagination.

  7. Rinse and repeat.    Do the math.  Talk about leveraging your investment!!

 
 Last I checked, someone is giving these people jobs - they, illegal = breaking the law - are not just standing on street corners, sucking up resources. Do you really have a handle on what is going on in our economy right now? I wonder what is really driving productivity in the American economy. I wonder is our unofficial policy is, let "them" in to take the jobs that let some of "us" practice comparative advantage, and focus on more value added tasks to help us compete in a global economy where labor itself is increasingly commoditized - so that we can compete with the developing economies of Southeast Asia and Brazil and China.
I agree.  This is illegal and the criminals are not just the people who are breaking into the country. The employers should be prosecuted too. Actually a lot of them are standing on street corners, or to be more exact in Home Depot parking lots.
If you think that no one is hurt by this on a personal level and that this is actually helping the "economy" you are sadly mistaken. This is not a victimless crime. Let me give you a real life example. Bring it down from broad generalisations to real life..... 
I have a friend who has/had a nice little handyman business.  Carpentry, yard work, minor plumbing, etc.  He was not charging much for his services, just enough to get by. $20.00 - $30.00 an hour plus materials. He made about $45,000 gross a year. His wife had a little part time job to supplement. Lived in a rural area so there are not any large employers. People need to make their own jobs in these areas. Loved his little 3 acre slice of heaven, on which he paid his property taxes and insured his house.  He paid his quarterly taxes, insures his vehicles, had liability insurance, had a bookkeeper to send invoices and keep track of his expenses and deductions for taxes. He was active in the local Chamber of Commerce, Rotary and fund raising activities for his children's elementry school.
Along comes someone who is living under the radar. No SS#, no tax return, no banking account, doesn't own a home, doesn't need to insure his auto and is willing to charge $10.00 an hour for the same service.  Most of my friend's clients stuck with him out of loyalty, but not enough. The greedy people win again.  He had to sell his property and move.  His wife now works full time and the kids are in day care after school. Meanwhile the illegal guy who has no ties to the community and gives nothing back, has now lowered the standard for everyone else who must compete on an un-level field.  The way to compete is, of course, to go underground yourself.  Cash is king!!
The community suffers. The living standards are lowered.  This is happening all over.
There is nothing politically correct or incorrect about wanting to have people obey the law and in objecting to the move by BofA and other companies to cash in (greed) on the illegal activities at the expense of society as a whole.
If you don't agree with me ..fine.  There is no racism involved here as  much as some people want to make it to be so.  I don't care who you are or where you are from. Illegal is illegal. The hypocrisy of there being one set of rules for some and another set of rules for others is what bothers me.
Be sure to tell us how opening that account is going for  you.

planrcoach's picture
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 are you brain dead??  Do you understand nothing about economics.
As I recall, you are an idiot. 
Hey, be nice. I know this is an emotional issue for you.
Most of my friend's clients stuck with him out of loyalty, but not enough. The greedy people win again.  He had to sell his property and move.  His wife now works full time and the kids are in day care after school. Meanwhile the illegal guy who has no ties to the community and gives nothing back, has now lowered the standard for everyone else who must compete on an un-level field. 
I am going to try to say this as nicely as possible. First, I am sorry about your friend, and I hear what you are saying about the pain and social upheaval.
Everyone who does not agree with you is not brain dead about economics or living in a bubble. You could influence me better by dropping the name calling tactic in your debate, instead of trying to paint me as being flakey.
From a global economic standpoint, your friend needs to upgrade his skills and education. This is necessary for everyone to compete in the global economy. Your ex- landscaper friend uses gas from the Middle East, tools made in China, coffee from South America, and is competing with laborers in all of those economies. Unfortunately, maybe not your friend, but some folks are also smoking pot and watching TV to see who gets voted off the island and eating twinkies at night instead of improving themselves by taking a class at the Junior college or doing some self study online.
Since when have Americans been entitled to be middle class while performing manual labor? The days of making $35 an hour in the auto plant, or charging that much to provide landscaping services - those days are over, and it is precisely because of YOUR shopping habits and your friends shopping habits.
Have you ever traveled to a developing country? How about your landscaper friend? When you come home, you realize how far ahead of the game you are just when you wake up in the morning.
China has chosen capitalism, and through consumption of her goods, we supported that turn from totalitarian economic behaviour. The political policy in this country is to ensure a stable Mexico and North American economy, the alternative is grim. Competition is the viable reality. We allow Americans to waste oil, but want to control competition in the labor market. That seems pretty silly.
You make some good points. We need a good immigration policy. So that issue has been politicized to the point of inaction so far - probably because we are just now getting to the point where we have enough Mexican souls in this country to keep the economy on track. I thank God we are blessed with this fine neighbor to the south.
 
 

planrcoach's picture
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Have you ever traveled to a developing country? How about your landscaper friend? When you come home, you realize how far ahead of the game you are just when you wake up in the morning.
Starting from this point, we all have to better our skills if we want to maintain and improve our quality of living, which is indeed happening, if you really see things for what they are.
I am not trying to sound elitist. Lack of economic education in this country is a big problem - in other words, your friend needs to plan ahead if he wants his wife to stay home with the kids and still make a good living. A few years ago, we were worried about the demise of the family farm, now the price of corn looks pretty good.
My point is, this is America's strength - competition and freedom. These are good times right now, in terms of opportunity. Maybe not easy times for most, but having lived in communist China about 25 years ago, I can tell you that the alternative is not very pretty. You wonder why there is no meat for sale in the market, and you hear that the leading cadre got a delivery to his back door last night.
The folks that took a covered wagon out west 150 years ago did not jump off the wagon and start looking for the social services office. As for this forum, I hope there are a few hard nosed capitalists that know what I am talking about.

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More seriously, people who are in this country illegaly are criminals as are those who employ them. Weather this is common or not, has nothing to do with the legality of it.
So is smoking pot. Not that I would choose to do either. But when you look at the economics of free choice, there are a lot of parallels. Kind of like voting for the war, but not really being for the war. BAC is aiding this problem. So this is a bad move for that reason alone.
Agreed, bad PR move. One that points out the power of the media, over rational economics, to the ultimate detriment of the American economy. I'm sure we can agree on this point. BAC is also exposing themselves to massive credit issues by lending money to rootless people with unstable income. If these people are deported, do you think paying their CC bills will be a priority?
Big assumption on deported. What is these people get to stay in America? Good bet, B of A. That's just one little slice in your asset allocation. Little potential downside, big potential up. For that matter, I like B of A even better now, maybe I'll give them some more business. Above and beyond the credit risk issue, is the huge opening for fraudulent transaction's which will happen. It is just too juicy to go around opening up checking accounts and passing bad checks. Same thing with opening up and maxing out CC's.
Okay, I'll say it. Is this racial profiling? My Mexican aquaintances are Catholic and God fearing - they have great values. They live in North America, that does not make them good or bad.
My impression is that " these people " have fueled our huge productivity gains, notabley in housing and agriculture, but take that down to staffing restaurants and other service businesses. Turning North American resources around the American economy. If there is a surplus of housing, which there should be in the cycle, that is good for somebody. If this isn't the beginning of a transitional economy (from export lead SE Asia dominance), I don't know what would be amore successful scenario.
The beauty of markets, in my view, is that things are not always what they seem, when you shift your viewpoint a little. Which also makes it hard to add value through portfolios security selection, over time. Which puts us squarely back in the business of educating and giving our clients the big picture, versus being mutual fund jockeys.

AllREIT's picture
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Planr, if you want to be Sunny Jim about this, fine by me.

IMHO it is completely obvious that this will end badly, for BAC,
customers, investors, everyone. If you want exposure to banks then
there are hundreds of better, more interesting, more profitable, and better run banks than BAC.

BAC is going to eat alot of bad publicity, and credit losses from doing
this. In fact I doubt this will ever get off the ground b/c of AML
issues. 

skeedaddy2's picture
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You know ALLREIT, ask your doctor about Lunesta. This BAC stuff is keeping
you up at night.

babbling looney's picture
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Okay, I'll say it. Is this racial profiling? My Mexican aquaintances are Catholic and God fearing - they have great values. They live in North America, that does not make them good or bad.
Can't you read?  My discussion of this issue clearly states that not only illegals from any source (Mexico, Poland, Russia, Iran wherever)but also people who are legally in this country can exploit this to the detriment of Bank of America and other merchants. 
My objection has nothing to do with Mexicans or Catholics.  My Mexican and Catholic relatives who are legally in this country are not happy with this move either. That is a strawman you are concocting.
My objection and concern has to do with the ILLEGALITY of granting credit to people who are undocumented.  It has to do with the danger to the bottom line of the company(s) that are doing the granting and the effect this will have on the stock as an investment.
And most especially it has to do with the hypocrisy of allowing one group of people (illegal aliens non citizens) to operate by one set of rules that are not allowed to the rest of the population.
By the way how is opening that account at B of A without a social security card coming for you?
Like it or not....people are pissed off and it is going to backfire on the companies that are bending over backward in their greed to twist and break the laws.  As an investment advisor, you should be paying attention to the dynamics that can adversely affect the investments your clients hold.
I just picked up yesterday, over 500k in cash from one of those pissed of people.  They drove over 150 miles to the nearest B of A branch so they could withdraw their funds in person and be able to express their feelings.  I expect to get more in the future.
 

planrcoach's picture
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Okay, I'll say it. Is this racial profiling? My Mexican aquaintances are Catholic and God fearing - they have great values. They live in North America, that does not make them good or bad.
Can't you read?  My discussion of this issue clearly states that not only illegals from any source (Mexico, Poland, Russia, Iran wherever)but also people who are legally in this country can exploit this to the detriment of Bank of America and other merchants. 
 My comment was in response to Allreit, not you. Re read what was said.
Like it or not....people are pissed off and it is going to backfire on the companies that are bending over backward in their greed to twist and break the laws.  As an investment advisor, you should be paying attention to the dynamics that can adversely affect the investments your clients hold.
I just picked up yesterday, over 500k in cash from one of those pissed of people.  They drove over 150 miles to the nearest B of A branch so they could withdraw their funds in person and be able to express their feelings.  I expect to get more in the future.
My prediction is that this will be a lousy client for you. Better put them in that guaranteed annuity, just don't get sued over the surrender charge when they get pissed off over the next big thing.
As an investment advisor, you should be paying attention to the dynamics that can adversely affect the investments your clients hold.
Agreed. This is my attempt to be diligent.
Just becauses some people are pissed off, you still have to think for yourself. Allreit, I think Seth would agree with that. " Sunny Jim ? "
And most especially it has to do with the hypocrisy of allowing one group of people (illegal aliens non citizens) to operate by one set of rules that are not allowed to the rest of the population.
Glad you mentioned this, as it is what really torques my motor. Maybe we should elect Lou Dobbs for chief economist, as " it will all end badly", anyway.
You want to talk about hypocracy? It would take about three days for Americans to "round up" all of the "illegals" in this country, if we had the political will. It is the official policy of this country to do what we are doing - Donkeys and Elephants have their own reason for this policy.
Then you have the media pundit, exploiting the likes of your hot headed new client. And you have:
As an investment advisor, you should be paying attention to the dynamics that can adversely affect the investments your clients hold - Bank of America.
Instead of being hypocritical, they are trying to serve reality and be good stewards of shareholder capital.
But the net result seems to be economic ignorance. Micro logic projected onto the macre reality. Thus, " things will end badly?".
What? Where did you get that obscure Seth Klarman quote - being a value investor in the style of Warren Buffet, this makes no sense.
The final economic perversion is to devolve into emotion ( I do understand this is an emotional issue) and a sort of liberal snobbery (Sunny Jim) that is not the sum of the reality of our own national economic policy of wanting to have an open border.
Logically, does it not seem a little silly to think that we could not solve this "problem" in three days? So your are really just angry at the politicians.
By extension, the Social Security number arguement does not addd up. Last I checked, that was important on the tax side, not the spending side. Who are you to tell the B of A how to make money?
 

babbling looney's picture
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My prediction is that this will be a lousy client for you. Better put them in that guaranteed annuity, just don't get sued over the surrender charge when they get pissed off over the next big thing.
You really can't read, can you? 
I have already stated my position on annuities.  You can try to distort that anyway you want to.
Sorry to disappoint you. Most of my clients have been with me for well over 10 years and my average account size is in the mid to high 6 figure range. This is why I have time to fart around on this forum.  I'm adding this new money to the rest of their portfolio.
national economic policy of wanting to have an open border
Says you.  I suggest you ask the people of this country how they feel about open borders.
 

planrcoach's picture
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You really can't read, can you? 
I have already stated my position on annuities.  You can try to distort that anyway you want to.
Not a personal attack on you.  My point is, guaranteed principal for someone who will panic about something else. You said they were moving the money from a bank - this suggests a conservative or in inexperienced investor, relevant to my whole point here about economic ignorance in general.  Interesting that you assume I am trying to distort things to make you look bad. I am sure you are very successful and ethical, and will do the right thing for the client  I respect you. I don't take pleasure in trying to build myself up at the expense of others.  
national economic policy of wanting to have an open border
Says you.  I suggest you ask the people of this country how they feel about open borders.
This is the real issue. Obviously, in Washington, a mixed bag. Republicans want to help the small business person and farmer in a transitional (from manufacturing) economy. Democrats want the perceived future support of an increasing Latino population.
Do you really think that the open border is hopeless from a technology or civil service point of view?

AllREIT's picture
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skeedaddy2 wrote:You know ALLREIT, ask your doctor about Lunesta. This BAC stuff is keeping
you up at night.

I've been getting attacks of migranes at night.

doberman's picture
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Maybe BAC will securitize the illegals' credit card portfolios as junk bonds and pass the risk on to investors. 

planrcoach's picture
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Good idea.

NOFX's picture
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ezmoney wrote:
BOA speaks with a forked tongue. They'll allow illegal aliens w/o SS#'s to get credit cards yet the premiers and banking centers can't work with non-resident aliens. We as FA's also have to go through hell with KYC docs to work with a non-resident alien. These bankers are something else. I'm glad I'm out of here soon.
[/QUOT
REAL GOOD , LEGIT point on the NRA/KYC vs lending $ to illegals. 

AllREIT's picture
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doberman wrote:Maybe BAC will securitize the illegals' credit card
portfolios as junk bonds and pass the risk on to
investors. 

Hmmm, if they sell those bonds to unsuspecting investors via the BAC/FA  system the underwriting and securitisation profits could offset the credit losses on the underlying portfolios.

Perhaps Planr is right. This might just work out to BAC's benefit.

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My Mexican aquaintances are Catholic and God fearing - they have great values. They live in North America, that does not make them good or bad.
My impression is that " these people " have fueled our huge productivity gains, notabley in housing and agriculture, but take that down to staffing restaurants and other service businesses. Turning North American resources around the American economy. If there is a surplus of housing, which there should be in the cycle, that is good for somebody. If this isn't the beginning of a transitional economy (from export lead SE Asia dominance), I don't know what would be amore successful scenario.
Not good values: if they are here ILLEGALLY and Bof A should not be granting credit to ILLEGAL ALIENS.  But I'm sure positive talk is from people who hire them to do cheap labor like lawn work and such.  They're normally on street corners looking for such work.
http://www.embargowellsfargo.com/BoAandLaRaza.html
Bando de UnAmerica is right!

planrcoach's picture
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Perhaps Planr is right. This might just work out to BAC's benefit.
As long as it is labeled as "junk" as sold as such, what is the difference. You can make everything out to be a moral dilemma, if you like.   I suppose a lot of players in the economy are unsuspecting, and that's why we have righteous RIAs like you to serve the unsuspecting higher net worth segment.

4luvofmoney's picture
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ok, I admit it: they've done lawn work for me and they do windows, too!
Guess BofA figures if they're going to be here: might as well get some banking and get a cc card, too--after all, they have a little money to burn (might not be up to minimum wage par, though). 
 

Philo Kvetch's picture
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Some of you seem to have an image of illiterate wetbacks who are willing
to work for $2/hr burned into your brains. You really do need to
disabuse yourself of that notion.

I don't know what it's like in your respective cities and towns, but I can
tell you that there is a construction boom going on in Orlando. Many, if
not most, of the construction workers are Hispanic. I have clients and
friends who are construction and construction services contractors, and
to a man they prefer Hispanics over Anglos. The workers they hire are
well paid for the area, and payroll deductions are taken. Do you know
why these people are the preferred labor force? Because they show up
every day, ready for work. They do a good job. In short, they are what
Americans were in the 30, 40s and 50s. I meet them in the stores and
restaurants. I meet them on Sundays, dressed in their Sunday best,
coming out of Church with their families. They have something very
powerful...the American Dream. Are they legal or illegal? I really have no
idea. But this I do know...those of us who look down upon these people
should revise their attitudes...after all, your children will be working for
their children.

planrcoach's picture
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they are what Americans were in the 30, 40s and 50s.
Voice of reason, brother.
imho, a few folks on here would be well served to walk the Liberty Trail in Boston ( again). Check out the Old Meeting Hall, Boston Tea Party. A few steps away, a tribute to the Irish, who upset everything and took all the good jobs when they fled the potato famine. Now check out Chicago, home of the Irish, City of Big Shoulders, hog butcher to the world.
I get a kick out of how history stops with us, once we make our choices. And get ours, or don't get ours.
What about our moral imperative, as Americans, to succeed in the pursuit of Liberty, through freedom.
The pounding surf of free markets destroys political correctness.
Around these parts, brother Kvetch, Mexican Americans are creating so much real value in real estate, and sending so much money to Mexico to build their own houses, I am humbled to be a North American neighbor and friend. Like the Irish in Boston there is pain, you can whine or you can figure out how to join the party.
For those Americans who are disabled by genetics, alchohol, or fate, we do need to provide a social net. For the rest, start working on your skills.
...those of us who look down upon these people should revise their attitudes...after all, your children will be working for their children.

ezmoney's picture
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Did anyone read the editorial by Ken Lewis in the WSJ. What a joke! Typical banker. He fails to realize they made a horrible PR error, and yet won't admit it and instead vows to continue with the program. 

AirForce's picture
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Joined: 2006-10-12

Its great that BOA is the credit card that all federal employees have to use. On top of that they always say they have to raise rates because of the defaults. I think millions of illegals should get the card then run across the border. What a joke!

AirForce's picture
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Philo.. In gereral most foreign employees work extremly hard. If you came from a country where you make 200 a month and then you can make that in two 12 hour days... I would work harder.

Florida wages for blue collar are the lowest in the country. The illegal coorelation is 100%. The more illegal employees you have in the market the more the lower the wages. Now some people point and say this is good for business. It is bad all around.

babbling looney's picture
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those of us who look down upon these people should revise their attitudes...
I don't look down on "these" people. My problem is with the double standard of ILLEGALITY and separate rules and flaunting of the laws.  Either they are illegall=broken the law, or the laws (working for cash, no social security card, no income tax filing, no insurance on cars, no accountability) need to be repealed for everyone.  I still DARE anyone here to try to open a checking account and refuse to give the bank your SS#.
I am related by family connections to "these" people from Mexico. I lived in Mexico as a child. I was baptized in Mexico. My grandparents were LEGAL residents of Mexico for over 20 years. I am also related to "those" people who are from South American (Argentina and Uruguay) by blood, so your strawman that I am a racist is just plain false. Illegal immigration is not just a problem from Mexico. We have leaks on our northern borders and on each coast. 
Hypocrisy is hypocrisy.  Just because there are millions of illegals in the country breaking laws every day, doesn't make it right. I don't care that they work hard.  So what?  If millions of legal residents should decide that we don't want to abide by laws, should we all get away with it?  I don't want to wear my seat belt, buy insurance for my car, file my taxes, pay social security out of my income.  I plan to eat transfat and wear my Ipod when I cross the street and talk on my cell phone in my car.  Come on....let's all do that and the numbers of us will make it right.
and sending so much money to Mexico to build their own houses, I am humbled to be a North American neighbor and friend.
So it's OK then to work illegally for less wages than prevailing legal residents and depress wages and put people out of work who are abiding by the rules?  As Air Force says it is not good for the local economy.  It's ok to not pay taxes and then send the money out of the country???   And don't give me that "well they pay into SS and will never collect" poor babies.  The SS numbers that they are using (stolen from someone else) cause no end of problems when the IRS decides that the real person hasn't paid their taxes because the SS contributions are coming in from the employer.  http://www.recordnet.com/apps/pbcs.dll/article?AID=/20061126 /A_BIZ/611260302  That's OK with you?  Riiiight...., until it is YOUR social security number and identity that has been stolen and you are being dunned by the IRS.
Like the Irish in Boston there is pain, you can whine or you can figure out how to join the party.
And here is the real crux of the matter.  The illegals are not joining the party. They are keeping to themselves. They are not learning the language and customs of the country that they have broken into. The are not becoming American Citizens as immigrants have in the past.  In a town near me which is very heavily populated will illegals  Their  children (legally born here and illegally in the country) go to the local high school, the students and parents refuse to stand up for the National Anthem at football games because the say "This isn't my country, why should I stand up".  Those are actual words!!!.  As a result of this  at least 20% of the people who could afford it, have removed their children and put them into charter and private schools.  How is this a good thing for either the illegals or the citizens who are taxpayers supporting the public school system.
Aside from the immigration issue, actions like this by B of A are encouraging and enabling illegal activity.  Besides the fact that they are allowing illegals to have privildeges denied to the rest of us, the company is opening itself up to fraud and abuse by not just illegals but by unscrupulous citizens, terrorists and money laundering scemes.
As an advisor, I don't see how this can possibly be a bottom line benefit for stock holders and bond holders.

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